U.S. natural gas futures edged up almost 2% on Wednesday as liquefied natural gas exports soared following hurricane shutdowns in late August and on record sales to Mexico.
After dropping over 7% on Tuesday with a similar plunge in crude prices, front-month gas futures rose 4.5 cents, or 1.9%, to $2.445 per million British thermal units at 8:35 a.m. EDT (1235 GMT).
Data provider Refinitiv said output in the Lower 48 U.S. states was on track to rise to 87.9 billion cubic feet per day (bcfd) in September, up from a three-month low of 87.6 bcfd in August. That, however, is still well below November's all-time monthly high of 95.4 bcfd.
With exports rising and expectations for warm weather through mid September, Refinitiv projected U.S. demand would rise from an average of 84.0 bcfd this week to 85.8 bcfd next week. That is higher than Tuesday's forecast.
In late September, however, demand is expected to decline as air conditioning use drops when the weather turns cooler.
The amount of gas flowing to U.S. LNG export terminals soared by a record 1.8 bcfd on Tuesday as Cheniere Energy Inc's Sabine Pass plant in Louisiana continues to ramp up after shutting for Hurricane Laura. Average flows so far in September were 4.1 bcfd.
That puts gas piped to LNG plants on track to rise for a second month in a row in September for the first time since February when average flows hit a record 8.7 bcfd. Coronavirus demand destruction caused U.S. LNG exports to drop every month from March to July when flows to plants fell to a 21-month low of just 3.3 bcfd as buyers canceled cargoes.
U.S. pipeline exports to Mexico, meanwhile, were on track to rise to 6.1 bcfd in September, which
would top August's 5.9-bcfd record.